The Fed's continued obsession with slashing interest
rates and printing money in order to maintain the facade of the grossly
overvalued stock market while the dollar collapses is precipitating
a financial holocaust. Yuppies need to cut their losses and accept a
soft crash now or place the very pillars of the American economy in
danger.

Sentiment is widespread that yesterday's shock 75 basis
points cut in the federal funds rate served only to instill more panic
in an already fragile environment, doing more harm that the extra liquidity
in the financial system can compensate for.

Some experts are actively encouraging a stock market
crash now so as to allow the system to bottom out, rather than sliding
down the same path towards fiscal armageddon in two or three years.

Clem Chambers, CEO of ADVFN, Europe’s number
one stocks and shares website, writes
in Forbes, "In many ways, the best thing that could happen
now would be a quick crash. A lot of professionals are praying for a
so called "puke" because that would set a bottom for a recovery
and signal that the worst is over. A short, sharp shock would be good
for everyone. Recovery is better than sickening."

(Article
continues below)

Chambers says the outlook is bleak through to the end of
2010 and that without this "puke" the second leg of
the credit crunch could lead to a "financial train wreck
on a scale not seen by the current generations".

Facing the reality of the fact that the stock market
is grossly overvalued due to the weakness of the dollar and is due a
severe correction seems impossible to accept for the yuppies who have
buried their heads in the sand and consumed establishment propaganda
that the economy was "in good shape" for the past three years.

This is why the Fed's policy of continually lowering
interest rates to artificially prop up the stock market by devaluing
the dollar looks set to continue, with a 2.5 per cent level expected
to be in place by spring.

"We now expect the Fed to cut another cumulative
100 basis points off interest rates. The next instalment will probably
come at the formal meeting on 30 January – another 25 or 50 basis
points. We would expect to hit 2.5 per cent by the April meeting,"
predicts
Nigel Gault, chief US economist at forecasting body Global Insight.

But by continually slashing rates in a vain attempt
to rescue the illusory strength of the stock market, the Fed will sacrifice
the dollar, which will in turn dissuade foreign investors from buying
U.S. stocks anyway.

As writer Dave Lindorff explains in his latest
column, "The Fed is in a trap. It cannot cut interest rates
much more without causing a collapse in the dollar, which, because
of the huge US trade imbalance, and all those consumer goods and raw
materials--especially oil--that are imported--would lead to serious
and politically dangerous inflation. And there is another constraint:
with the current rate cut, the US now has the third lowest interest
rates in the world. If the Fed makes another cut, as it has hinted
it might in a week or so, only Japan would have a lower interest rate
environment than the US. That makes the dollar a very undesirable
currency for foreigner investors, which means they won't want to hold
dollars, and they won't want to hold US stocks. Yet if the Fed doesn't
cut interest rates even further, the stock market will continue to
plunge, which again discourages foreign investors from pouring their
money into the U.S., which in turn puts downward pressure on the dollar."

"The Bush chickens--endless deficits as far as the eye can see,
and a $2-trillion military debacle that has no end in sight and that
is sucking money out of the country like a giant industrial vacuum
cleaner--are coming home to roost," he concludes.

If the Fed really were interested in preventing long-term
fiscal armageddon and hyper-inflation, the yuppies would be forced to
cut their losses, eat humble pie and see their stocks reduced to their
true value - the dollar would survive and the fundamental economic pillars
would remain in place for a genuine recovery after 2010.

This would be the best medicine for the vast majority
of hard working, tax-paying Americans, but as we are painfully aware
- Bernanke, Paulson and the like only have the interests of their bosses
at heart and for the elite, economic chaos and a possible depression,
as occurred in 1929, only benefits their long-term plan to bankrupt
and pillage America to fulfil their own crooked agenda.

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